Today I will have the privilege of officially opening Total’s impressive new gas plant on Shetland. It’s a significant development not only for Shetland, but for the UK as a whole – clearly showcasing the ongoing potential of the North Sea and using innovative techniques to extract gas from reservoirs deeper than we previously thought possible.
The oil and gas that we get from the North Sea is crucial to our energy mix and will be for some time. The UK Government stands 100 per cent behind this vital industry and the hundreds of thousands of workers and families it supports. In the last two Budgets we announced radical packages of tax measures worth £2.3 billion to ensure the UK Continental Shelf continues to be an attractive destination for investment. No other Government has made fiscal changes as extensive as these in response to falling oil prices, and TOTAL’s commitment to this project demonstrates that companies can confidently invest in the UK – a confidence that is possible because of our strong position in the EU single energy market which attracts billions of pounds of investment in UK energy by providing energy security and full access to the world’s largest single market of 500m people.
Clearly the low oil price has brought real challenges to this industry, but we’re determined to do everything we can to take advantage of the UK’s broad shoulders. With the Energy Bill successfully passing through Parliament last week the Oil and Gas Authority (OGA) can now become a fully empowered, strong and independent regulator. CEO Andy Samuel and his team can now build on the already fantastic work they’ve been doing by driving greater collaboration and productivity in the industry, and I look forward to seeing the industry capitalising on this.
Total’s new site has been a huge construction project – the biggest in the UK since the 2012 Olympics. At full capacity the site will supply 8% of the UK’s gas requirements, equivalent to 2 million homes, while creating jobs and providing secure, affordable energy to the UK’s families and businesses for decades to come.
This is an incredible feat – but I want to be clear that there are more opportunities out there waiting to be discovered. That’s why we’ve given £40 million to fund seismic studies over the last two years, so the industry is able to go out and uncover that potential. The OGA is now working with industry to ensure that this data is used innovatively and effectively so that we can make the most of the resources that we have beneath the seas around the UK.
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